CASE STUDTY

Kathy McCarthy was the manager of a production department in Alvis Corporation, a firm that manufactures office equipment. 'DIe workers are not unionized. After re~lding an ;.trtiele that strc:ssed the bem:fib of participative Inanagement, Kathy bdi-eVtxl that these henefits could be realized in her department if the 'workers were allowed to palticipate in making f:omc decisions that affect them. Kathy selected t'l/O decisions for an experiment in participative management.

The first d<"-"cision invo]"t.:'d holiday schedules. Each SUlnmer the workers are given two weeks holiday) but no more than two vorkers can go on holkbi-Y at the same time. In prior years, Kathy made thi~ decision herself She could first ask the vorkers to indicate their preferred dates. then she considered how the work would be affected if different people wel:' out at the same time. It \/a,.;; hnportant to plan a holiday schedule that would ensure adequate staffing t(}r all of the essential operation., performed by the department Vhen more than two vorkers vanted the same time period, and they had similar skills, she usually gave preference H) the workers vith the highest productiVity, The second decision involved production standards, Sales luid been increasing stt'adily over the past few years, and the company recently instaI1ed some ncv equipment to increase productivity, 111e new equipment would make it possible to produce more with tht.~ same number of workeL". lne company had a pay incentive system in which workers received a piece rate for each unit produced above a b1andard amount.

Separate standard1-i exi;.;Ied for each type of product, based on an industrial engincering study conducted a few years earlier. Top management wanted to readju:'1 the production standards to rel1(;,'(1 that fact that the new equipment made it pos..-.ible for the workers to earn more without working any harder. The savings from higher produLiivity were needed to help pay for the new equipment.

Kathy called a meeting of her 15 workers an hour before the end of the work day and explained that she wanted them to discuss the two issues and make recommendations. Kathy figured that the workers might be inhibited about participating in the discussion if she were present, so she left them alone to discuss the issues. Besides, Kathy had an appointment to meet with the quality control manager. QUality problems had increased after the new equipment was installed, and the industrial engineers were studying the problem in an attempt to determine why quality had gotten worse rather than better. When Kathy returned to her department just at qUitting time, she was surprised to learn that the workers recommended keeping the standards the same. She had assumed they knew the pay incentives were no longer fair and would set a higher standard. The Cases 517 worker speaking for the group explained that fhelr base pay had not kept up with inflation and fhe higher incentive pay restored fheir real income to its prior level.

On the holiday issue, the group was deadlocked, Several of the workers wanted to take their holiday during the same two week period and could not agree on who should go. Some workers argued that they should have priority because they had more seniority, while others argued that priority should be based on productivity, as in the past. Because it was quitting time, the group concluded that Kathy would have to resolve the dispute herself. After all, wasn't that what she was being paid for?

QUESTIONS

1. Were the two decisions appropriate for a group decision procedure according to the Vroom-Yetton model?

2. What mistakes were made in using participation, and what could have been done to avoid the difficulties the manager encountered?

3. Were these two decisions appropriate ones for introducing participation into the department?